Editing Efficient-market hypothesis (section)

===2008 financial crisis===
The [[2008 financial crisis]] led to renewed scrutiny and criticism of the hypothesis.<ref>{{cite news |url=https://www.theglobeandmail.com/globe-investor/investment-ideas/features/taking-stock/sun-finally-sets-on-notion-that-markets-are-rational/article1206213/|title=Sun finally sets on notion that markets are rational|work=[[The Globe and Mail]] |access-date=7 July 2009 |date=7 July 2009}}</ref> Market strategist [[Jeremy Grantham]] said the EMH was responsible for the [[2008 financial crisis]], claiming that belief in the hypothesis caused financial leaders to have a "chronic underestimation of the dangers of asset bubbles breaking".<ref name="nytimes.com">{{cite news|url=https://www.nytimes.com/2009/06/06/business/06nocera.html?scp=1&sq=efficient%20market&st=cse|title=Poking Holes in a Theory on Markets|last=Nocera|first=Joe|date=5 June 2009|work=[[The New York Times]]|access-date=8 June 2009}}</ref> Financial journalist [[Roger Lowenstein]] said "The upside of the current [[Great Recession]] is that it could drive a stake through the heart of the academic nostrum known as the efficient-market hypothesis."<ref name="washingtonpost.com">{{cite news|url=https://www.washingtonpost.com/wp-dyn/content/article/2009/06/05/AR2009060502053.html|title=Book Review: 'The Myth of the Rational Market' by Justin Fox|last=Lowenstein|first=Roger|date=7 June 2009|newspaper=[[The Washington Post]]|access-date=5 August 2011}}</ref> Former [[Federal Reserve]] chairman [[Paul Volcker]] said "It should be clear that among the causes of the recent financial crisis was an unjustified faith in rational expectations, market efficiencies, and the techniques of modern finance."<ref>{{cite magazine |url=http://www.nybooks.com/articles/archives/2011/nov/24/financial-reform-unfinished-business/ |title= Financial Reform: Unfinished Business|author=Paul Volcker |date=27 October 2011 |magazine= [[New York Review of Books]]|access-date=22 November 2011}}</ref> One financial analyst{{who|date=March 2022}} said "By 2007–2009, you had to be a fanatic to believe in the literal truth of the EMH."<ref>{{Cite journal |last= Siegel |first= Laurence B. |year= 2010 |title= Black Swan or Black Turkey? The State of Economic Knowledge and the Crash of 2007–2009 |journal= [[Financial Analysts Journal]] |volume= 66 |issue= 4 |pages= 6–10 |doi=10.2469/faj.v66.n4.4|s2cid= 218510844 }} Quote on p.&nbsp;7.</ref>

At the International Organization of Securities Commissions annual conference, held in June 2009, the hypothesis took center stage. [[Martin Wolf]], the chief economics commentator for the ''[[Financial Times]]'', dismissed the hypothesis as being a useless way to examine how markets function in reality.<ref>{{cite journal |last1=Apolaagoa |first1=Christian |last2=Namakobo |first2=Annetta |last3=Singh |first3=Angad |last4=Bhattacharyya |first4=Ritabrata |title=Efficient Market Hypothesis Empirical Test to Debunk the Weak Form Using Selected Stocks |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3686552 |website=SSRN |date=2020 |doi=10.2139/ssrn.3686552 |ssrn=3686552 |s2cid=233753452 |access-date=10 October 2023}}</ref> Economist [[Paul McCulley]] said the hypothesis had not failed, but was "seriously flawed" in its neglect of human nature.<ref>{{cite news|url=http://fr.jpost.com/servlet/Satellite?cid=1244371066953&pagename=JPost/JPArticle/ShowFull |archive-url=https://archive.today/20120708053758/http://fr.jpost.com/servlet/Satellite?cid=1244371066953&pagename=JPost/JPArticle/ShowFull |url-status=dead |archive-date=8 July 2012 |title=Has 'guiding model' for global markets gone haywire? |work=[[The Jerusalem Post]] |access-date=17 June 2009 |date=11 June 2009 }}</ref><ref>{{cite news|title=Investors are finally seeing the nonsense in the efficient market theory|url=https://www.telegraph.co.uk/finance/comment/tom-stevenson/5562355/Investors-are-finally-seeing-the-nonsense-in-the-efficient-market-theory.html |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/finance/comment/tom-stevenson/5562355/Investors-are-finally-seeing-the-nonsense-in-the-efficient-market-theory.html |archive-date=12 January 2022 |url-access=subscription |url-status=live|newspaper=The Daily Telegraph|date=2009-06-17|last1=Stevenson|first1=Tom}}{{cbignore}}</ref>

The [[2008 financial crisis]] led economics scholar [[Richard Posner]] to back away from the hypothesis. Posner accused some of his [[Chicago school of economics|Chicago School]] colleagues of being "asleep at the switch", saying that "the movement to deregulate the financial industry went too far by exaggerating the resilience—the self healing powers—of laissez-faire capitalism."<ref name="newyorker">{{cite magazine |url=http://www.newyorker.com/reporting/2010/01/11/100111fa_fact_cassidy|title=After the Blowup|magazine=[[The New Yorker]] |access-date=12 January 2010 |date=11 January 2010}}</ref> Others, such as economist and Nobel laurete [[Eugene Fama]], said that the hypothesis held up well during the crisis: "Stock prices typically decline prior to a recession and in a state of recession. This was a particularly severe recession. Prices started to decline in advance of when people recognized that it was a recession and then continued to decline. That was exactly what you would expect if markets are efficient."<ref name="newyorker"/> Despite this, Fama said that "poorly informed investors could theoretically lead the market astray" and that stock prices could become "somewhat irrational" as a result.<ref>Jon E. Hilsenrath, [http://fisher.osu.edu/~diether_1/b822/fama_thaler.pdf Stock Characters: As Two Economists Debate Markets, The Tide Shifts] {{webarchive|url=https://web.archive.org/web/20120406035022/http://fisher.osu.edu/~diether_1/b822/fama_thaler.pdf |date=6 April 2012 }}. Wall Street Journal 2004</ref>